8 Commitments and contingent liabilities

To meet the financial needs of borrowers, FMO enters into various irrevocable commitments (loan commitments, equity commitments and guarantee commitments) and contingent liabilities. These contingent liabilities consist among others of financial guarantees, which commit FMO to make payments on behalf of the borrowers in case the borrower fails to fulfill payment obligations. Though these obligations are not recognized on the balance sheet, they do obtain Credit Risk similar to loans to the private sector. Therefore, provisions are calculated for financial guarantees and loan commitments according to the ECL measurement methodology. 

Furthermore, the contingencies include an irrevocable payment commitment (IPC) to the Single Resolution Board (SRB) in Brussels. In April 2016, the SRB provided credit institutions with the option to fulfil part of their obligation to pay the annual ex - ante contributions to the Single Resolution Fund (SRF) through IPCs.

 

June 30, 2022

December 31, 2021

   

Contingent liabilities

  

Encumbered funds (single resolution fund)

1,453

1,453

Effective guarantees issued

97,963

69,341

Less: provisions, amortizing fees

-13,353

-1,953

Total guarantees issued

84,610

67,388

Total contingent liabilities

86,063

68,841

   

Guarantees received

  

Effective guarantees received

-409,233

-334,221

Total guarantees received

-409,233

-334,221

Nominal amounts for irrevocable facilities is as follows:

 

June 30, 2022

December 31, 2021

   

Irrevocable facilities

  

Contractual commitments for disbursements of:

  

- Loans

483,582

627,630

- Equity investments and associates

747,045

701,141

- Contractual commitments for financial guarantees given

152,900

136,450

Total irrevocable facilities

1,383,526

1,465,221